FutureGen probably dead without DOE funding, chairman says

Published 6:00 pm, Monday, February 4, 2008

Associated Press Writer

The developers of the FutureGen clean-coal power plant still hope to gain federal funding to build the futuristic facility in central Illinois.

But construction does not seem possible without the U.S. Department of Energy's pledged contribution for the $1.8 billion project, developers said Tuesday, a week after the agency backed away from roughly three-quarters of the funding.

Construction is "very, very unlikely" without the DOE, FutureGen Alliance Chief Executive Officer Mike Mudd said as the group planned to try to get the money from Congress.

The FutureGen Alliance, the power and coal companies developing the plant, had planned to pay for 26 percent of the project, with the DOE providing the rest. The plant is intended to demonstrate that most of the carbon dioxide from coal can be captured and stored, allowing the fuel to be used at power plants with near-zero emission of the greenhouse gas.

But the DOE backed away, citing cost concerns. The agency is soliciting new inquiries from private industry for what it says could be a series of clean-coal projects.

"I do not believe it has a chance to go forward in its current state without the private and public sectors working together," Paul Thompson, chairman of the FutureGen alliance board, said just before the group began two days of meetings in Mattoon.

Sen. Dick Durbin, the leader of Illinois' congressional delegation, said last week it would be a struggle to get Congress to provide money for FutureGen without a change of heart at the DOE.

But the senator was more encouraged after talking to lawmakers who sit on committees in both houses of Congress that have oversight of the agency, a spokeswoman said Tuesday. Durbin, a Democrat, is a senior member of one, the Senate Appropriations Committee.

"What he has found is a sense of anger and dismay about DOE's slight of hand on FutureGen and sympathy for the residents and leaders of Mattoon who did everything right, played by the rules _ only to have the Secretary of Energy pull the rug out from under them," Durbin spokeswoman Sandra Abrevaya said in an e-mail. "These members of Congress know if this can happen in central Illinois, it can happen in their districts as well."

A DOE spokeswoman did not immediately respond to a request for comment.

The DOE has complained publicly since late December about the project's rising costs _ to $1.8 billion from $800 million when it was announced in 2003 _ but says it has talked with the alliance since last April about its concerns.

Alliance members say the increases are the result of rising prices for commodities like cement and steel. The alliance proposed a plan, rejected by the DOE, to cover any further cost overruns.

Durbin and others have accused the DOE of backing away from FutureGen over political considerations. Mattoon was chosen over a neighboring town, Tuscola, and two locations in Texas. One of those Texas sites is in the west Texas oil country that President Bush long called home.

In the latest of series of testy exchanges, Durbin and Rep. Tim Johnson, an Illinois Republican, on Tuesday accused Undersecretary of Energy C.H. "Bud" Albright of saying the DOE was not interested in "building Disneyland in some swamp in Illinois" during a conference call with FutureGen Alliance members and others involved in the project.

Albright later apologized.

"I regret the comment I made," Albright said. "It does not reflect my view then or now, nor does it reflect the view of the department or Secretary Bodman."

Both Thompson and Mudd said Tuesday they had no idea why the DOE pulled its support for FutureGen.

"It baffles us," Mudd said.

Thompson said he believed the alliance and DOE had worked "quite well together" to address the rising cost of the project.

"We thought we were making very good progress all the way into December," he said.

The companies that make up the alliance_ including major utilities such as American Electric Power and Southern Company and coal producers like Peabody Energy and Consol Energy Inc. _ probably won't bid to be part of the DOE's new clean-coal projects, Thompson said.

They will use the meetings in Mattoon to talk about how to move the project forward, Thompson said.